Malaysia EPF invest RM342 Billion every year. We get EPF to invest 0.1% = RM342 Million in entrepreneurs. Invest base on concept of peer network review.
Means that entrepreneur who is asking for funding must demonstrate that he / she is credible person and must get as many people as possible to vouch for the entrepreneur’s credibility.
So, that we know the money provided to the entrepreneur will be put into good use to build a business & create jobs.
As we know… We (employers + employees) contribute approx. 23% (collectively) back to EPF; EVERY month.
If you do the math & assuming that 30% of work cap (which is low) goes towards wage bill, EPF will get return on capital invested in the entrepreneur’s business within 15 months!!
Does not include equity & interest gains, assuming EPF is allowed or keen to take equity & interest into this scheme.
So, EPF wins if there are more jobs created and people contribute back to EPF. If there are no jobs or tightening of belts, the working class will opt for smaller contributions or (worst) no contributions & that does not help EPF either.
So, how many jobs can we create?
If each entrepreneur gets (say) RM 500k, then RM342M will be able to fund 684 NEW companies. If each biz hires average 50 people, we can immediately CREATE 34,200 NEW jobs.
Say nothing about the spending power that 34,200 people with money in their pockets can do to give even more jobs to more people.
Plus Entrepreneurs create business for other businesses.
And not to forget wealth creation, capacity building in terms of intellectual capital, new innovative product & services offering…
Lastly even if only 10% of the 684 companies make it; i.e. 68 companies make it BIG and their 500k becomes 10x more valuable (which is also small, going by my personal track record), we would have “put back” the entire RM 340 million. Best of all this amount would go into the greater economy and not just EPF.
Multiplier effect is HUGE.
By Guest Contributor
Gerald Lim, CEO at GENME Group Sdn Bhd. Gerald is also an investor of startup YourParttime.com
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